Dive Brief:
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Adidas Group appears to be turning things around, with sales in Q1 rebounding 17% to $4.54 billion (more like 9% when adding in the effect of currency fluctuations), handily beating expectations.
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The company has shifted from its struggling TaylorMade golf brand, in which it has discounted much of its merchandise, to focus more on the urban-based athletes and sports like running, according to its Q1 report. Fashion-forward sports brands Originals and NEO increased sales by more than 10%, and Adidas-owned Reebok had a 9% bump, taking out currency effects.
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The company also announced a five-year strategy to improve its supply chain and improve sales by half.
Dive Insight:
Adidas is paying particular attention to its huge North American market, in part because it’s spooked by the swift, strong rise of number three Under Armour. In addition to greater attention to urbanites and to fashion, look for Adidas to also pay attention to the huge-but-till-now-ignored women’s market, on which rivals Under Armour and Nike are increasingly focusing.
CEO Herbert Hainer said the strong Q1 start is a sign of things to come for the full year.
“I am proud how fast we rebounded after a challenging 2014," said Hainer in the earnings announcement. "Now, after getting off the starting block well this year, we are optimistic about our prospects for the full year. But we will not stop there. Our new strategy, 'Creating the New', will enable us to accelerate the adidas Group's growth until 2020 and create sustainable value.”